What are the Articles of Association in Hong Kong and do you need one? We’ll explain in this beginners’ guide.
The Articles of Association is a document outlining the governing principles and rules of a company for when you want to start or register a company in Hong Kong.
In this guide we’ll look at:
Let’s get started!
The Articles of Association is a document that contains the rules and regulations governing the affairs of a Hong Kong company.
It is an essential document for any company, as it sets out the rights and duties of shareholders, directors, and other company members.
The articles also specify how the company will be managed, how decisions are made, and also educate the general public on aspects of the Hong Kong company.
The contents of the Articles of Association for a Hong Kong company are divided into mandatory categories and other categories.
Let’s look at each category in more detail.
The company articles must contain the following clauses:
The other contents of the articles vary depending on the company. Here is a rundown of some of the contents.
The Articles of Association is a must-have for the following type of companies in Hong Kong:
“The articles of a company limited by guarantee must state that each person who is a member of the company undertakes that if the company is wound up while the person is a member of the company, or within one year after the person ceases to be such a member, the person will contribute an amount required of the person, not exceeding a specified amount, to the company’s assets—
(a)for the payment of the company’s debts and liabilities contracted before the person ceases to be such a member;
(b)for the payment of the costs, charges and expenses of winding up the company; and
(c)for the adjustment, among the contributories, of their rights.”
When establishing a company in Hong Kong, you must prepare and file Articles of Association. Doing so is very straightforward:
Other than these steps, there are no set rules to follow when preparing articles of association. You can use this sample to get started. Ensure the articles have all the mandatory requirements before submitting them to the company registrar.
The other requirements can be adopted sparingly because they’re not mandatory.
If you’re unsure about how to prepare and file an Article of Association for your company, BINERY can help!
If you need to amend your company’s articles of association, there are set rules determined by the type of changes you want to make.
Articles of association can be altered with a special resolution or ordinary resolution. The resolution should be submitted with the relevant forms and the altered articles of association.
Here’s an overview of the changes you can make, plus the requirements.
The required documents must be submitted to the registrar within 15 days of amending the Articles of Association. If a company contravenes this requirement, the company and every member of the company are liable to a fine of $10,000. There is also an additional fine of $300 per day for all the days the offense continues.
The main difference between the articles of association (AOA) and memorandum of association (MOA) is that MOA is simpler and less formal, while an AOA is more detailed and provides more protection for shareholders.
On March 3, 2014 the new Company Ordinance in Hong Kong abolished the MOA, as the objects clause, which states why a company was formed and the type of business it intends to operate, was only mandatory for limited companies and associations to fill. As the AOA was a more detailed version of the MOA, the government decided to reduce redundancy and make the AOA the only requirement for registering a company.
The objects clause is no longer mandatory for all Hong Kong companies. As we’ve seen above, the clause is mandatory for limited companies and associations that are licensed under section 103, meaning that unlimited companies are not subject to the objects clause.
If a company was incorporated under the old company ordinance, the MOA is viewed as part of the company’s AOA. Although making changes is unnecessary, the company registry encourages companies to update their articles to avoid confusion.
Updating the AOA is important because the company can take advantage of the new provisions (as of March 3, 2014) in the new company ordinance. Some updates include:
You can view a sample MOA and AOA here. As you can see from the sample, the MOA is not as detailed and includes the objects clause that states all the activities the company will engage in.
The AOA, on the other hand, is more detailed with information on the type of company, shareholding, lien, general meetings, and more.
To quickly recap:
Articles of Association are mandatory for all Hong Kong companies, so we hope this guide allowed you to better understand the articles of association and why they’re important.
If you need help with your company’s AOA, please don’t hesitate to contact us. We will save you time and make the process simpler and easier for you.